The State is to sell off most of its stake in Aer Lingus via an initial public offering (IPO) and has told corporate advisors to start work on the sale "immediately", the Minister for Transport has announced.
After years of speculation, Mr Cullen said work on the process to float up to 59.9 per cent of the company on the stock exchange would begin despite the continued opposition of trade unions.
He said the decision was taken to give Aer Lingus the commercial flexibility and financial muscle to compete and succeed in the global marketplace. "This is a good day for Aer Lingus staff, customers and the broader Irish economy," he said.
"We have cleared the way for Aer Lingus to access the funding necessary to offer new routes, expand employment and offer better consumer choice.
"We have mandated company management to resolve the key issues raised by the trade unions during the consultation process.
"I am confident that a way forward can be found in which the staff's interests can be addressed and in which the future of the company can also be secured."
The Government, which currently owns 85 per cent of the company, insisted it will retain a shareholding of at least 25.1 per cent to allow it to balance the airline's commercial needs while protecting the state's strategic interests.
Staff own 15 per cent of the airline, which employs 4,000 people and operates over 30 aircraft serving cities across Europe, the United States, and most recently Dubai in the United Arab Emirates.
Government advisors have been instructed to complete the sale as soon as possible, taking account of exchange regulations and market conditions.
Trade unions have expressed concerns about job security and pensions following privatisation, while the possible dilution of the shareholding of the Employee Share Ownership Trust (ESOT) has also provoked fears.
But it is understood Finance Minister Brian Cowen has mandated management to negotiate with the unions on a package of measures to address their concerns.
The Government also said it was open to considering an upfront investment from the sale proceeds and increased contributions by both the company and its employees to address the deficit in the company pension scheme.
The final details of the sale will be agreed between Minister for Finance Brian Cowen and Minister for Transport Minister Martin Cullen and then the disposal of the state's majority shareholding will be put before the Dail for approval.
Taoiseach Bertie Ahern told the Dail the decision was good news for the airline, its staff, its customers as well as the broader economy.
"The transaction will give Aer Lingus access to the broadest range of funding available in financial markets," he said.
"It will also enhance the company's financial strength and give it the commercial flexibility that is necessary to compete in one of the world's most dynamic industry.
"It will see the long haul fleet doubling and the short haul fleet growing by over 55 per cent in the next five years with obvious positive implications for the number employed in the airline.
"It will lead to a significant increase in the airline's global reach thus enhancing international access to Ireland for the inward investment, industrial and tourism sectors."
Mr Ahern said the concerns of the trade unions were understandable but that the Government had spent two years deliberating before taking its decision last year, and then had allowed a further 12 months for consultations.
Sinn Fein and the Irish Labour Party insisted the sale of Aer Lingus marked a bad day for Ireland.
